Bank of Korea Considers Cautious Approach to Won Stablecoin – Coincu

The Governor of the Bank of Korea, Rhee Chang-yong, on June 18, expressed a cautious stance on a potential Korean won stablecoin. While remaining open to the concept, he highlighted potential risks.

His comments underscore concerns about increased demand for USD stablecoins and the potential impact on traditional banking models and FX management.

Rhee Highlights Stablecoin Risks to Banking and FX Stability

According to The Korea Economic Daily, Rhee Chang-yong outlined his perspective on a Korean won stablecoin, addressing the sector’s connection to foreign exchange management. He noted potential demand shifts towards USD stablecoins and impacts on the traditional banking sector. Rhee Chang-yong mentioned, “Active use of stablecoins could shift payment and settlement functions from the banking sector to non-banking entities, potentially impacting banks’ revenue structures and business models.”

Rhee highlighted potential shifts in payment systems moving functions from banks to non-banking entities, which may impact banks’ revenue structures. Coordination with financial authorities is deemed essential for managing systemic risks associated with stablecoin issuance.

Statements reflect a cautious approach to digital currency adoption. While no direct market movements have been linked to these announcements, industry watchers remain attentive to future policy updates.

South Korea’s Cautious Path to Digital Currency Innovation

Did you know? In global contexts, past announcements of stablecoin developments have sometimes led to increased pressure on domestic financial systems. This warrants keen monitoring of South Korea’s approach to its own digital currency.

Bitcoin (BTC) currently trades at $104,481.48, with a market cap reaching $2.08 trillion, showcasing 64.13% market dominance. The recent 24-hour trading volume records a decrease of 3.61%, standing at $50.64 billion. Over the past 24 hours, BTC reported a 1.21% decline, with wider monthly and quarterly trends indicating slight positive growth, per CoinMarketCap data.

The Bank of Korea Governor’s openness to won-denominated stablecoins suggests a proactive approach to addressing potential financial and regulatory risks. Ongoing assessment of how these digital assets impact the traditional financial ecosystem remains a top priority for Korean authorities aiming to align with evolving global standards.